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Nokia will pay $2.2 billion to buy partner Siemens AG in their network equipment joint venture, a deal that could help the company offset its weakness in its smartphone business.

Nokia and Siemens AG have entered into a definitive agreement pursuant to which Nokia acquires Siemens' entire 50% stake in their joint venture, Nokia Siemens Networks. The acquisition is subject to the customary regulatory approval process.

The purchase price for Siemens' stake is EUR 1.7 billion and the transaction is expected to close during the third calendar quarter of 2013. Upon closing of the planned acquisition, Nokia Siemens Networks will become a wholly owned subsidiary of Nokia.

Stephen Elop, President and CEO of Nokia, commented: "With its clear strategic focus and strong leadership team, Nokia Siemens Networks has structurally improved its operational and financial performance. Furthermore, Nokia Siemens Networks has established a clear leadership position in LTE, which provides an attractive growth opportunity. Nokia is pleased with these developments and looks forward to continue supporting these efforts to create more shareholder value for the Nokia group."

Joe Kaeser, Siemens CFO, commented: "With this transaction, we continue our efforts to strengthen our focus on Siemens' Core areas of Energy management, Industry and Infrastructure as well as Healthcare. The full acquisition of Nokia Siemens Networks by Nokia offers an attractive opportunity to actively shape the telecom equipment market for the future and create sustainable value."

Nokia Siemens Networks was established on April 1, 2007, as a joint venture combining Nokia's Networks Business Group and Siemens' carrier-related operations for fixed and mobile networks. Nokia Siemens Networks has since become a global provider of telecommunications infrastructure. The company's focus is in offering mobile broadband technology and services.

Nokia plans to retain the existing management and governance structure at Nokia Siemens Networks, with Rajeev Suri continuing as CEO and Jesper Ovesen continuing as Executive Chairman of the Nokia Siemens Networks Board of Directors, which will adjust to the changing ownership structure.

Nokia Siemens Networks' operational headquarters will remain in Espoo, Finland, and the company will continue to have a strong regional presence in Germany, including its major hub in Munich.

In accordance with this transaction, the Siemens name will be phased out from Nokia Siemens Networks' company name and branding. Nokia and Nokia Siemens Networks plan to confirm the new name and brand at the closing of the transaction.

The purchase price totals EUR 1.7 billion, of which EUR 1.2 billion will be paid in cash at the closing of the transaction.